- Consumer Sentiment: 59.2, expected 58.0, previous 57.7; contractionary.
- Q1 GDP (2nd estimate): +0.3% q/q (+1.3% annualized), up from +0.275% (1st estimate); contractionary.
- Durable Goods, New Orders (DGORDER): +1.1% m/m, expected -1.1% m/m, prior +3.2%; expansionary.
- Fed Balance Sheet (WALCL) -20B w/w; deflationary.
This week both the 1 and 10-year rates moved higher, while the 1-month and 3-month rates mostly held steady. The 1-month yield saw a shocking rally mid-week, but descended back down to mostly unchanged by Friday. You can’t see the fuss on my rates chart, since it is a “weekly” line chart, which eliminates all the intra-week volatility. Chances of a Fed rate increase are much higher this week: the CME Fedwatch Tool assigns a 64% chance of a 25 bp rate increase at the June 14th meeting. Short-term rates appear to confirm this prediction.
The buck rose 1.06 [+1.03%] to 104.14 – the gains came on Tuesday-Thursday. The dollar is now in a relatively strong uptrend. For those concerned about de-dollarization, RMB/USD (Fred: DEXCHUS) rose 0.83% this week. Once again, RMB is going in the wrong direction if a near-term “End of the Dollar” plague is striking. A possibility: the dollar is rallying because US rates are also rising – and it doesn’t look as though the Fed will “pivot” any time soon. Are you enjoying your 5.6% 1-month Treasury yield? I know I am – I’m going to enjoy the party while it lasts. How long will it last? A month? Six months? No idea. Does it keep up with inflation? Of course not!
Gold fell 27.60 [-1.39%] to 1954.00, due probably to the dollar rally. Most of the damage happened Wednesday/Thursday. This week I’m providing the Open Interest, which saw a fairly dramatic decline this week. Those banksters are cashing in on the gold correction, it seems. If we use OI as an indicator, a “low” might occur after another 30k of OI is cashed in. Maybe that’s roughly gold=1925? Give or take? Also notice the last correction (in February) was 3 weeks long. Maybe this one will be also? Just guesses. OI remains low by 2021/2022 standards.
Silver fell 0.70 [-2.91%] to 23.36, dropping for most of the week but bouncing back on Friday.
by thatchmo 
